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Addressing urban job losses

Budget-making calls for the balancing of politics and economics, and it is evident that the 2009-2010 interim budget has had a little more to do with the former. The allocation of Rs.30,100 crore for rural employment — through the UPA government’s flagship programme, the National Rural Employment Guarantee Scheme (NREGS) — can be attributed to the economic support base it has created since its launch in 2006. Politically speaking too, this programme is seen by the ruling coalition as one that caters to the “aam admi,” bypassed by the previous BJP-led government’s “shining India” campaign in the 2004 general election. The ability of the NREGS to make improvements in rural livelihoods has been borne out by the enthusiastic response it has received at the state level. The gaps in implementation identified during field studies — such as inadequate scale of work and delays in wage payments — need to be plugged if the scheme is to make a lasting contribution to improving the lot of rural masses.

Yet what is disappointing about the interim budget is that it has not provided any clue as to how the government proposes to generate more employment for non-rural workers, which is an urgent need. The World Bank has served a timely warning through its recent report, “The Global Economic Crisis: Assessing Vulnerability with a Poverty Lens,” which counts India among countries that have a “high exposure” to increased risk of poverty due to the global economic downturn. As the sectors that fuelled high annual economic growth brace themselves for hard times, job creation in these areas has also weakened. Specific measures to facilitate employment are called for in segments that are badly affected by the economic slowdown, such as Information Technology (IT), IT-enabled services, textiles, gems and jewellery, and retail trade. Also missing is a concrete action plan for creating a meaningful social security net. These tasks are bound to be more problematic a few months from now, particularly given the prospect of a lower national economic growth and with no signs of an early reversal of the global slide. In a pre-election budget, it would have made enormous political sense for the government to indicate the policy direction vis-À-vis employment creation in the short- and medium-terms and initiate schemes that could be brought to fruition quickly. The absence of such a direction has left the entire burden of addressing the urgent issue of urban employment to the successor government that will be formulating the full budget.

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